Senator Lummis Backs CLARITY Act, Citing Strongest DeFi Developer Protections

On March 28, U.S. Senator Cynthia Lummis stated that the latest revised CLARITY Act will provide “the strongest protections ever” for DeFi and its developers, urging for its swift passage. Lummis’s remarks were a response to concerns raised by crypto lawyer Jake Chervinsky. Chervinsky had argued that the definition of “money transmitter” in the current draft’s Chapter 3 could still encompass non-custodial software developers within the regulatory scope, thereby undermining the legal protections originally intended by the Blockchain Regulatory Certainty Act. Lummis emphasized that recent bipartisan adjustments to the relevant clauses aim to ensure that non-custodial developers are not mistakenly classified as financial institutions, thus avoiding mandatory compliance obligations such as KYC. Despite these assurances, industry divisions persist. Chervinsky pointed out that the controversy surrounding stablecoin yield provisions has overshadowed the issue of developer protection, and that “avoiding the misclassification of developers as money transmitters” remains a core challenge in DeFi regulation. The bill is currently expected to enter the Senate Banking Committee for review in April, and its ultimate passage will depend on the outcome of negotiations among various parties on key provisions.